Report: Ohio wells producing

Higher rates seen by using fracking

April 3, 2012

COLUMBUS - Natural gas wells using the drilling method known as hydraulic fracturing are producing at a much higher rate than traditional wells, according to the first look at production figures from nine active wells in the Utica shale formation in eastern Ohio.

Figures reported Monday by Oklahoma City-based Chesapeake Energy Corp. show five wells in eastern Ohio producing 2.6 billion cubic feet of natural gas in 2011. The other four wells produced hundreds of barrels of oil but are not in natural gas production yet, according to Chesapeake.

Information reported on the sole Mahoning County well, located in Milton Township, produced 758 barrels of oil, and the lone Portage County well yielded 583 barrels of crude. Chesapeake has not drilled into the Utica shale in Trumbull County.

In five cases, three among Carroll County wells and in the Mahoning and Portage wells, the oil was collected during drilling completion and flowback, not as a result of commercial production.

The report, which Chesapeake provided to the Ohio Department of Natural Resources, shows one well in Harrison County producing 1.5 billion cubic feet of natural gas, or 2 percent of the state's entire natural gas production. Put another way, that well has 300 times more in daily production than the average well drilled vertically into the ground, said Rick Simmers, chief of ODNR's Division of Oil and Gas Resources Management.

"The preliminary production for all the wells on the gas side is very high," Simmers said.

A total of 46,326 barrels of oil and 2.6 million cubic feet of natural gas were produced last year among the company's operative wells. All wells produced oil, while only five produced natural gas.

Four wells in Carroll County produced1.04 million cubic feet of gas and 30,041 barrels of oil over 481 combined days of production. One well in Harrison County produced the most of any of Chesapeake Appalachian's Ohio wells; 13,472 barrels of oil and 1.5 million cubic feet of natural gas, over 198 production days.

The nine wells collectively also have produced 76,004 barrels of brine water, more than 44,000 barrels coming from Carroll County. Notably the lone Harrison County well, which produced the most oil and gas, produced only the fourth largest amount of brine water, a little more than 8,900 barrels. One well in Carroll County yielded 23,585 barrels of the chemical-laced salt-water.

Companies including Chesapeake have drilled 38 other wells that have yet to report production.

Ohio has issued about 150 permits for Utica shale wells. By contrast, the state has about 49,000 traditional gas wells reporting production of about 73 billion cubic feet in 2011.

The figures continue to fuel Chesapeake's optimism about the formation, spokesman Keith Fuller said in a statement. "The data reported, while promising, is still very limited and only a small part of the information needed to gauge the potential of the entire formation," he said. ''We will continue to gather information and move forward with our plans to increase our rig count in Ohio to 20 rigs by the end of the year and to build a significant gathering and midstream complex in the region to accommodate an anticipated increase in production of natural gas liquids."

The data reported Monday involves wells drilled using a method dubbed "fracking," in which thousands of gallons of chemically laced water are blasted into shale deposits, freeing natural gas trapped in the layers of shale.

The natural gas reported Monday includes both "dry" gas that can be distributed almost immediately to gas companies for home and business use, and "wet" gas that includes other proponents such as butane and propane that must be stripped out, Simmers said.

Eastern Ohio is in the midst of a natural gas boom as developers seek to capture rights to Utica shale deposits. Last month, BP announced it had leased 84,000 acres of land in the Utica/Point Pleasant shale formation in Trumbull County for oil and gas production. Those wells have yet to be drilled.

The Utica shale lies below the Marcellus Shale, where oil companies in Pennsylvania have drilled thousands of wells in search of natural gas and, more recently, oil.

Also last month, Chesapeake announced a $900 million project for gathering, compression and processing of natural gas and natural gas liquids. The project will roll out over five years, with parts of the complex scheduled to begin operations by June 2013.

Decisions by Chesapeake and BP to develop in Ohio come despite a proposal by Republican Gov. John Kasich to increase taxes that oil and gas drillers pay for extracting the state's natural resources. Ohio's oil and gas association has criticized Kasich's plan as a potential turnoff to drilling activity. The governor wants to use the proceeds to fund a modest statewide income-tax reduction beginning in 2016.